Government tackles social housing profiteering

The Czech government has moved to curb widespread profiteering from social
housing. The draft legislation, which was approved by the cabinet this
week, should stop hostel owners from charging exorbitant rents for
substandard housing. However, social workers say that the socially
disadvantaged need access to the housing market which is often denied due
to their race.

Photo: Filip Jandourek
There are around 4,000 hostels in the Czech Republic providing substandard
accommodation to those who have nowhere else to go: the poor and the
unemployed, and, in many cases, the Roma community.

The lack of state or communal social housing projects has turned such
hostels into a lucrative business, with owners often charging enormous
rents covered by state welfare payments. Official figures show that in
2011, 850 million crowns were paid out in housing welfare; since then, the
amount has skyrocketed to 2.8 billion.

The government now wants to end this practice by introducing legislation
that should cap rents in these facilities, and change the rules for
providing housing welfare payments. The bill was put forth by Minister of
Labour and Social Affairs Michaela Marksová.

Michaela Marksová, photo: Filip Jandourek“One of the measures that will prevent such profiteering is that welfare
payments will relate to the living area. Until now, hostel owners place
eight people in one room, and each of them received the highest possible
welfare payment. That will no longer be possible because these people will
be legally considered a household, and the payments will not increase
according to the number of people.”

The legislation also caps the rents that can be charged to welfare
recipients to amounts in line with the local housing market. In addition,
local authorities will have to approve accommodation standards in these
hostels as a condition for providing welfare payments. And Minister
Marksová says the government is set to increase the number of staff at
Labour Offices in affected areas who will be making sure all these
conditions are met.

The previous caretaker Czech government also attempted to clamp down on
social housing profiteering when it tried to come up with a framework for
the issue. But its planned overhaul came under fire by NGOs and social
workers who said it would in fact make things worse by cementing the status
quo.

One of the NGOs working in socially excluded communities is People in
Need. The group welcomes the government’s latest effort but says much
broader changes are needed to ensure everyone has access to the housing
market. Martin Kovalčík is a spokesman for the NGO’s social integration
programmes.

Photo: Jan Beneš“One of the most common reasons why people end up living in those
hostels is that they cannot afford to pay deposits to landlords. Also,
there is rampant discrimination: when a Romany wants to rent, it’s quite
common they are turned down just because of their race, which makes it
extremely difficult for these people to rent regular apartments or
houses.”

Mr Kovalčík says one way cities and towns could help open up the housing
market for the socially disadvantaged would be to assist them with security
deposits while providing guarantees to landlords.